Jobless Claims Data Tops the List

Markets are watching weekly unemployment claims even more closely than usual.

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Thursday’s data includes the weekly claims report, at 8:30 a.m. ET, followed by the Philadelphia Fed survey and leading indicators, both at 10 a.m.

“From a macro standpoint, given the Fed’s focus on the job market, it will be the claims data and the Philly Fed employment component,” said John Canally, investment strategist and economist at LPL Financial. The Fed’s latest round of quantitative easing is aimed at helping the housing market through mortgage purchases and creating the economic conditions that would lead to more job growth.

The claims report is expected to show 373,000 new claims, and is the first since the Fed announced its plan last week to buy $40 billion in mortgage securities a month.

Before the U.S. data, markets will first be digesting the results of a Spanish bond offering. “If it doesn’t go well, that pushes Spain to ask for help. If it does go well, they buy some time” before having to request aid, Canally said.

In the U.S. at noon, the Fed releases its flow of funds data, which will show household net worth. “It’s going to show that you’re nearly back to where you were pre-crisis,” Canally said.

Boston Fed President Eric Rosengren speaks at 7:45 a.m. ET on economic and monetary policy, and Minneapolis Fed President Narayana Kocherlakota speaks at 11:30 .am. at Gocebic Community College in Inwood, Mich. He will take questions from the audience.

Stocks closed slightly higher Wednesday, after Japan announced a new bond buying plan and U.S. home sales data came in much better than expected. The Dow was up 13 points at 13,577, while the S&P was up 1 at 1461. The yield on the 10-year Treasury note fell for a third day, touching 1.782 percent in afternoon trading.

The big action Wednesday was in the oil market, where crude continued its selloff. WTI crude fell 3.5 percent to $91.98 per barrel, and is down more than 7 percent for the week. The selloff came after the Fed’s QE3 announcement last week helped lift West Texas Intermediate to $100 briefly.

“I think it was caused by something relatively technical,” said Edward Morse, head of commodities research at Citigroup, of the selloff. On Monday, oil dropped very quickly in a mini flash crash in the final hour of trading. Since then, it continued its decline. News headlines about Saudi Arabia increasing production to 10 million barrels a day, and comments from the White House that it would consider using the Strategic Petroleum Reserve if prices go too high weighed on the market.

“It’s the Saudi campaign to talk prices down, and it’s all the SPR talk, so nobody wants to be long in a market that may go down,” said Morse. Morse said the move into commodities and out of the dollar, on Fed easing last week, was overdone and the market is correcting back from that move.